This chapter reports the conditions under which the Board of Directors’ work is prepared and organised and includes a summary of the principles of organisation that guarantee a balance of powers. It includes the complete text of the Internal Rules of the Board of Directors.
All components of the remuneration of directors and corporate officers are provided, as is the trading in L’Oréal shares reported by directors and corporate officers in 2021, and the remuneration policy pursuant to Article L. 22-10-8 of the French Commercial Code.
The Code of Corporate Governance to which the Company refers is the AFEP-MEDEF Code. This code may be consulted online at the following address: http://www.medef.com/. In accordance with the provisions of Article L. 225-37, section 6 of the French Commercial Code, this chapter includes a specific section of the Management Report on corporate governance and reports on the following, in particular:
The other information included in the particular section of the Management Report dedicated to corporate governance is published in chapter 7 of this document, specifically:
In accordance with the recommendations of the AFEP-MEDEF Code, this chapter identifies, in a summary table, those provisions of the Code which were not applied and explains the reasons for that choice (see section 2.5. “Summary table of the recommendations of the AFEP-MEDEF Code which have not been applied” of this document).
L’Oréal has a method of corporate governance that is suited to its specificities and is part of a constant quest for progress. The procedures for conducting the General Management of L’Oréal have always been decided in the best interest of the Company and with the constant concern that the mode of governance chosen will make it possible to optimise the Group’s financial and economic performances and to create the most favourable conditions for its long-term development.
After a period of 5 years (between 2006 and 2011) during which the duties of Chairman of the Board of Directors and those of Chief Executive Officer were separated in order to ensure a smooth transition between Sir Lindsay Owen-Jonesand Mr Jean-Paul Agon, the Board of Directors decided in 2011 to merge these positions and to appoint Mr Jean‑Paul Agon as Chairman of the Board of Directors responsible for the Company’s General Management (Chairman and Chief Executive Officer of L’Oréal), roles that he held until 30 April 2021.
As the Company’s Articles of Association do not provide for any exception to the legal retirement age of 65 years for the Chief Executive Officer, Mr Jean-Paul Agon was required to hand over his duties as Chief Executive Officer before 6 July 2021.
On his recommendation, the Nominations and Governance Committee initiated the process to appoint the future Chief Executive Officer.
On 14 October 2020, on the recommendation of the Nominations and Governance Committee, the Board of Directors announced its intention to dissociate the functions of Chairman and Chief Executive Officer, renew Mr Jean‑Paul Agon’s mandate as Chairman of the Board of Directors, a position he had held since 2011, and appoint Mr Nicolas Hieronimus as Chief Executive Officer.
Mr Nicolas Hieronimus joined L’Oréal 34 years ago. He held various positions in marketing before being named to General Management (L’Oréal Paris France, L’Oréal Paris World and L’Oréal Mexico). In 2008, Mr Jean-Paul Agon appointed him as General Manager of the L’Oréal Professional Products Division and welcomed him to the Executive Committee. In January 2011, he was appointed Chief Executive Officer of L’Oréal Luxe, a role that he held until the end of 2018. In 2013, he became Chief Executive Officer of the Selective Divisions (Luxury, Active Cosmetics, Professional Products). He was named Deputy CEO in charge of Divisions in May 2017.
This new governance took effect on 1 May 2021, by decision of the Board of Directors at the meeting held following the company’s Annual General Meeting on 20 April 2021.
The proposed organisation guarantees the sustainability of the performance, values and commitments of the Group, as well as the quality of its governance.
The Board of Directors and Mr Nicolas Hieronimus benefit from Mr Jean-Paul Agon’s successful and recognised experience in both positions. The Board of Directors can count on his expertise in matters of governance to meet the growing expectations of the Group’s stakeholders.
Mr Nicolas Hieronimus will provide his expertise in the cosmetics market and his intimate knowledge of L’Oréal acquired during a 34-year career with the Group, as well as his vision of the future of beauty to implement the strategic guidelines of the coming years. The Board is convinced that Mr Nicolas Hieronimus will be able to take advantage of all the opportunities offered by a fast-changing world to adapt the Group and reinvent it in keeping with its values, commitments and purpose (raison d’être) to “Create the beauty that moves the world”.
The Board, which considers the participation of the Chief Executive Officer in the discussions of the Board of Directors to be essential, submitted his appointment as a Director for approval at the Annual General Meeting held on 20 April 2021, of which 99.21% approved his appointment.
